"The political leaders of the two countries have decided to forget the past and build good relations between them," Ali al-Momen said at a media conference with Iraqi Foreign Minister Hoshyar Zebari.
Kuwait has claimed damages from Iraq for the August 1990 invasion and the following seven-month occupation by Saddam’s forces, which were expelled in 1991 by a US-led coalition.
The two oil-rich neighbours have yet to settle a number of issues related to debt and war compensation estimated at tens of billions of dollars.
"This (debt) subject needs more time and decisions and is in the hands of the Kuwaiti leaders," Momen said, but added that Kuwait is "open for Iraqis in all sectors but needs time to set up regulations."
Since the war with Saddam, Iraqis have been banned from entering Kuwait.
Baghdad is required to pay five percent of its oil revenue into a fund created by the UN Security Council as compensation for war damages linked to the invasion and occupation.
Saddam was toppled after the 2003 US-led invasion of Iraq and executed for crimes against humanity in December 2006.
Washington has been pushing its Sunni Arab allies to re-establish ambassadorial ties with Baghdad as a counterweight to Shiite Iran.
Earlier this month ambassadors of Bahrain, Jordan and Syria began working in Baghdad while a UAE envoy last month became the first Arab ambassador to be stationed in Iraq in two years.
